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Banks cutting local ties is better news for businesses than it may first appear

Posted 4 years ago

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Last week the Guardian reported that RBS was cutting jobs in its small business loans department and outsourcing work to India. These cuts follow the closure of 158 branches last year and represent a move from a state owned bank away from local representation.


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Arguably in our new interconnected world local representation is less important, but as brokers and indeed our own experience here at businessagent.com tells us that is not the case. It is true that the internet and online networks allow businesses access to networks that they might never have been aware of just 10 years ago.  It is also true that most businesses will research their loan options online for ease of comparison and yet it is thanks to local networks that brokers are able to source businesses that would benefit from loans and better understand these businesses to be able to connect them to the right loan provider.

 

Banks cutting ties locally has in the past been bad news for small businesses looking for loans. Centralised systems remove personal bias and the layer of knowledge and insight that can transform what seems on paper to be a bad bet into a bet worth taking. Instinctively we all know this and the “computer says no” system frustrates up and down the chain. Thankfully businesses no longer have to rely on Banks for loans.

 

Where Banks move out Peer-to-Peer (P2P) platforms and other alternative lenders move in. This increased competition is great news for businesses – simply put there are more options. At businessagent.com we have found that the P2P and alternative lenders can offer more attractive terms than the Banks for many businesses. We have also found that where some businesses are considered a bad bet by the Banks specialist alternative lenders will lend because they better understand the sector.

 

Unfortunately Peer-to-Peer and alternative lenders are still largely unknown or understood by the majority of small businesses in the UK, which is why these lenders and brokers are using local networks to spread the word.

 

Want to learn more about P2P lenders and rates? Take a look at the businessagent.com P2P comparison table, it offers full visibility of the sector in one place and is easy to digest. Interested in seeing if P2P or alternative lenders can offer your business a loan? Speak to the team here at businessagent.com.

Tagged: banks cutting local ties P2P peer to peer RBS good news for businesses



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